Former Agriculture secretary asks Congress to proceed with its probe on alleged overpriced P1.8 B fertilizer supply deal
A former secretary of the Department of Agriculture on Sunday called on both the House of Representatives and the Senate to push through with their respective investigation on the alleged overpriced contracts for urea fertilizer under the government’s emergency stimulus program in response to the COVID-19 pandemic.
Federation of Free Farmers president Leonardo Montemayor said the Agriculture Department must address the complaints raised by farmers that the winning bids were higher than the prevailing retail prices.
“One would expect that since it was a centralized bidding, and they were buying in bulk, the winning bids should be lower than prevailing retail prices,” said Montemayor, who served as agriculture secretary during the Arroyo administration.
“What happened here goes against common sense. How will the DA explain to farmers why the retail price is lower when it already includes additional costs?” he said.
The DA has set a ceiling price of P1,000 per bag of urea fertilizer for supply contracts across the country worth P5.69 billion under its stimulus program Ahon Lahat, Pagkaing Sapat Kontra COVID-19 (ALPAS sa COVID-19).
In May, the first contracts worth P1.8 billion were bid out, and suppliers La Filipina Uy Gongco Corporation and Atlas Fertilizer bagged the supply for Central Luzon, Calabarzon, Western Visayas and Central Visayas.
Despite farmers complaining that the initial winning bids were higher by as much as P150 per bag, the DA pushed through with the bidding for succeeding supply contracts worth P1.3 billion.
Just like in the first centralized bidding process, only one bidder has qualified per lot last month, namely Goldman’s Supply Corp. for North Cotabato; First Planters Agri Solution for La Union, Ilocos Sur and Pangasinan; and Universal Harvester Inc. for Cagayan, Isabela, Nueva Vizcaya, and Quirino.
“A lot of questions remain unanswered. These congressional investigations must push through because these are in response to legitimate issues raised by farmers on the ground who will be most affected by these issues. It is the duty of the House of Representatives and the Senate to act on this,” Montemayor said.
He also cautioned Agriculture Secretary William Dar from relying solely on the price monitoring reports submitted by the Fertilizer and Pesticide Authority and the Philippine Statics Authority.
Dar earlier insisted that the winning bids were not grossly disadvantageous to the government since they were all lower than average price of urea from P1,043 to P1,062 per bag in March to May.
“Aside from the FPA and the PSA, the department should also check on the ground using its own people at the regional offices, agri stakeholders, and distributors, among others,” Montemayor said.
He likewise urged the DA to crack the whip on winning bidders who fail to deliver their supply, saying this will have an impact on food security and rice production.
“Farmers are racing against time because of the cropping season. By now until August, they should have already planted so they can maximize production. Otherwise, farmers will be forced to plant without any fertilizer, and this will impact on the volume they will produce,” he said.
Samahang Industriya ng Agrikultura (SINAG) chairman Rosendo So earlier disclosed that La Filipina Uy Gongco has failed to deliver its obligation of 911,073 bags of urea fertilizer in Central Luzon by the end of June.
So said as of June 30, the supplier was only able to deliver about 110,000 bags of fertilizer, or about 12 percent of its total obligation.
Meanwhile, the National Federation of Peasant Women (Amihan) said it looks forward to the investigation that will be conducted by the committees on Agriculture and Food and Good Government and Public Accountability.
“The congressional inquiries will allow farmers to air their grievances,” said Amihan national chairperson Zenaida Soriano said
“There is urgency for an immediate investigation as DA’s distribution of fertilizers as well as the procurement process for the remaining fertilizers is ongoing. Everyone involved should be held accountable for having the guts to steal public funds while millions of Filipinos are suffering from the impact of the pandemic,” she added.
As this developed, SINAG has denounced the Agriculture department to bid out another batch of supply contracts for urea fertilizer, despite allegations of overpricing in the first few batches.
So alleged that the newest contract worth over P1.3 billion, like the first ones that came before it, were also “overpriced” and “disadvantageous” to the government.
But Dar belied SINAG’s claim, saying: “We are wondering where Mr. So has gathered his information, as the second round of bidding has not yet been completed.”
In their statement, SINAG said the DA used the same method when it bid out the first four supply contracts.
“Just like what happened in May, the DA again qualified only one bidder per lot... And all the bid prices are again ridiculously overpriced,” So said.
So lamented how the DA proceeded with the bid despite protests from various groups and plans at the House of Representatives and the Senate to look into the matter.
“And the DA pushed through with the next round of bidding despite protests from various farmer groups on the first contracts awarded as being overpriced,” he added.
According to the statement, six lots have been bid out for Regions 1 and 2, as well as Cotabato.
The qualified bidders are Goldman’s Supply Corp. for North Cotabato at P975 per bag; First Planters Agri Solution for La Union and Ilocos Sur at P975 per bag and Pangasinan at P985 per bag; and Universal Harvester Inc. for Cagayan, Isabela, Nueva Vizcaya, and Quirino at P975 per bag, when in some areas the retail price of urea fertilizer is as low as P850 per bag.
“Our members who are distributors and outlet owners have informed us that the retail prices in Regions 1 and 2 are far lower than the DA’s price report,” So said.
“Universal Harvester Inc., which won the contracts for Region 2, fetches for a retail price of only P860 per bag. In some areas, for as low as P850 per bag. Did the DA fail to monitor this that it awarded the contract for P975 per bag? That amounts to a P125 overprice per bag of fertilizer,” he added.
So said that the overpricing accumulated to P176.41 million with 797,089 bags for Region 1 and 614,233 bags for Region 2 or a total of 1,411,322 bags.
Dar, however, said that the public bidding for Regions I, II, and North Cotabato is considered failed bidding due to the companies not passing the post qualification.
“The DA’s Bid and Awards Committee (BAC) has yet to conclude the public bidding. Technically, it is still on-going,” the Agriculture chief said.
“We gladly welcome comments from all quarters, but they should have a factual basis,” Dar said.
“In the case of SINAG, Mr. So is again misleading the media and the general public. It is grossly unfair, and he should apologize publicly,” he added.
Several lawmakers have earlier filed a resolution seeking to investigate the transactions for the first few batches of bid contracts.
“The DA must have the sense to out on hold and/or suspend the succeeding bidding for the procurement of an additional P3.8 billion worth of fertilizer until the questionable bidding and procurement of the P1.8 billion fertilizer is given clarity,” lawmakers said in House Resolution No. 992.